What Happens to the House, the Car, the Dog?

Minnesota’s laws on asset division are usually straightforward. That’s the good news. The bad news is that you may not agree with how they’re applied.

“People have visions of how they think things should be—like, ‘I should get my pension’ or ‘I should get the house’—but it’s often not how it goes,” says Tom Tuft, a family attorney and mediator with Tuft, Lach, Jerabek & O’Connell in Maplewood. “Ninety-nine percent of the time it’s ‘take the assets and liabilities, and divide by two.’”

Minnesota is a no-fault state, “which means there’s no consideration of marital misconduct in dividing assets,” says Joani C. Moberg, a family law attorney with Henschel Moberg Goff in Minneapolis. “That’s important to know because, often, depending on why the divorce is happening, they may have an idea of what feels fair, but the courts don’t look at that. Minnesota is an equitable division state—equitable means fair, and almost always means equal.”

A spouse may feel they deserve more of an individual asset because they paid for it, have more emotional connection to it or their name is on the title, but these arguments have no legal bearing. “It doesn’t mean every asset is divided in half,” Moberg says, “but if you picture all the assets as being in one big pile, that is divided so the portion that each party gets is roughly the same.”

Non-marital property is the exception to the rule. If a spouse had property before the marriage, pain-and-suffering compensation, or gained property as a gift from a third party or an inheritance, those items go to the person who either had or received them. “So if my husband gave me a car while we were married, that’s not non-marital property. But if my parents gave it to me, it is,” Moberg explains. “It sounds pretty straightforward, but it can be complicated. The best example is with housing. Someone may have used an inheritance to make a down payment on a house, or a mortgage payment, or an improvement, which makes it partially marital and non-marital.”

And if a down payment was a gift, was it to one person or both? “I know a judge in Dakota County who had an 80-year-old grandpa testify recently about his intention with a check that he wrote to the closing company,” Tuft says. “Non-martial assets are very intricate and can get murky.”

Another area where asset division can get complicated is when one or both spouses own a business. It’s because of these complications and unique circumstances that the vast majority of divorce cases are settled out of court.

“The areas that are most common for litigation in family law are child custody and spousal maintenance, not assets,” Moberg says. “Sometimes people fight over cars or the house, and if they can’t agree, a judge may decide to sell it. Judges most often encourage people to settle instead. And, from my perspective, I don’t like to go to trial unless I think we’re going to do well. I don’t want to go in thinking I’d get something good for my client that they don’t end up with. They’re devastated, plus paid me a lot of money, so that’s not good for anyone.”

Out-of-court settlements and mediations also allow couples to get creative. “If you agree, you can always deviate,” Tufts says. “The other spouse could have a remarriage looming or an inheritance, so they don’t care about the pension. Most, but not all, people have a sense of integrity about these things and can come to an agreement.”

That said, there’s an adage among mediators: If everyone walks away a little unhappy, it’s a sign of a good negotiation. Asset mediations typically involve one party being compensated by the other in order to get the assets they want, not unlike one of Moberg’s divorce cases, where both spouses wanted the pet. “My client ended up taking less money than they were entitled to in order to keep the pet, and the other party was prepared to do the same.”

But both parties likely came away feeling less than enthused. “It’s not always easy to hear and can be disappointing,” Moberg says. “I’ve had cases where clients have been upset that they’ve had to give up half of their retirement, but that’s the way the law is. My pep talk is that in family law today, Minnesota is a leader in alternative dispute resolution, and we have a lot of tools at our disposal to get us from where you are when you first see me to where you want to be.”

Minnesota

“Sometimes people fight over cars or the house, and if they can’t agree, a judge may decide to sell it. Judges most often encourage people to settle instead. And, from my perspective, I don’t like to go to trial unless I think we’re going to do well. I don’t want to go in thinking I’d get something good for my client that they don’t end up with. They’re devastated, plus paid me a lot of money, so that’s not good for anyone.”

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